What is Factoring?

Factoring is a working capital solution where a business sells its unpaid invoices/receivables to a financier (the factor) at a discount, in exchange for immediate funds, instead of waiting for the customer's credit period to end. This helps businesses unlock cash that is otherwise tied up in outstanding invoices, improving liquidity without adding fresh debt on the balance sheet in the traditional sense.

Factoring is particularly useful for businesses that offer their customers extended credit periods (30/60/90 days) and need faster access to working capital to keep operations running smoothly.

How Factoring Benefits Your Business

• Converts unpaid invoices into immediate working capital
• Improves cash flow without waiting for customer payment cycles
• Reduces dependency on traditional collateral-based borrowing
• Helps manage supplier payments and operational expenses on time
• Can include credit protection against buyer default (in non-recourse factoring)

Basic Eligibility for Factoring

• Business operational for a minimum period with regular B2B sales on credit
• Genuine, verifiable invoices/receivables from creditworthy buyers
• Satisfactory track record of past collections
• Acceptable buyer concentration and credit profile
• Proper sales/purchase documentation

Facility Details

Documents Generally Required

• KYC of business and promoters
• Sales invoices and buyer details
• Last 2 years' financial statements
• Bank statements (last 12 months)
• Debtor ageing statement